As the market continues to price in potential worst-case scenarios in Europe, now is a good time for dividend investors to keep a shopping list handy. More dividend bargains could be coming our way as quality stocks are pulled down a bit by the wider market. More on this point below.

As far as the headline movers today, some of the earnings names bucking the weakness included Wal-Mart Stores (WMT), The Buckle (BKE), and Precision Castparts (PCP). On the flipside, we saw selling in shares of Advance Auto Parts (AAP), Gamestop (GME), and The Limited (LTD) following their earnings results. Wall Street analyst downgrades pushed shares of Abercrombie & Fitch (ANF) and Cintas (CTAS) lower. Also, Tiffany & Co. (TIF) shares were down a bit, despite news of the company raising its dividend payout by 10.3%. We did finally see gold prices (GLD) catch a bid as selling intensified. It has been tough sledding for commodity investors in 2012.

Down Days and Weeks Inevitably Happen in our Investing Lifetime

Dividend investors should never panic when the market’s inevitable down periods come around. As long as you stick to a strict sell discipline, you’ll be able to avoid holding on to shares of companies that have lost their way for too long. Also, we tend to look at down periods as providing some better entry points for high-quality dividend names. So when the markets do pull back, think offensively rather than defensively.

I understand that down days tend to make people nervous, but that’s human nature and totally expected. If a stock you own is going down particularly hard on days the markets are not down so much, you should always examine why that price action occurred. Remember, even companies that were once titans in the business world can crumble if their business model or execution erodes over time.

It pays to be proactive when it’s time to pull the weeds out of one’s dividend garden. Flat performance doesn’t worry me as much as negative returns when the rest of the market is moving up nicely over a period of time. The stock tape can sometimes warn us ahead of time that we need to consider making changes, so as I said above, be prepared to take action. Just avoid getting skittish if it’s simply the overall market pricing in potential bad news ahead.

New MLP Report Just Released!

In The Essentials of Investing in MLPs, we outline the do’s and don’ts of investing in high-yield Master Limited Partnerships (MLPs). Our exclusive new MLP report outlines everything you need to know about these popular high-yield investments, including:

- Understanding their unique company structure
- What you absolutely need to know about their special tax treatment
- Why MLPs may not be suitable for retirement accounts
- How to find the best high-yield partnerships
- …and much more!

We recently updated our list of dividend stocks that have been paying out dividends for 25 years or more. Be sure to check out the latest list of names here.

Dividends Really Matter

Financial blog DailyReckoning.com recently took a look at the difference dividend payouts made in the overall return investors saw throughout the prior decades. Here are some of the highlights:

- The Nasdaq is down 28% since the end of 1999. Even the “blue chip” S&P 500 stocks are down 15% during that time frame…until you add back those “boring” dividends. With dividends included, the S&P 500′s 15% loss flips to a 6% gain.

- Without dividends, the S&P 500 index would have produced a loss for the 25 long years from August 1929 to August 1954. Then again, without dividends, the S&P 500 produced a 5% loss during the 13 years from September 1961 to September 1974. But with dividends included, the S&P’s loss became a 46% gain.

- Over the course of the last half-century, dividends have contributed more than half of the stock market’s total return — 56%, to be exact.

Of course, you can’t discuss the potency of dividend investing without making mention of how awesome compound returns are. I can’t stress enough the power of compound interest: you take a small amount of money and turn it into a large amount over time. Finding the right companies at the right price points which not only grow earnings, but also grow their dividend payouts as well!

New Watchlist Article Out Today

Be sure to check out our weekly Top 50 High-Yield Watchlist Names post that is out today, exclusively for Dividend.com Premium members. This list gives readers a good idea of what stocks we’re watching behind the scenes here for potential upgrades.

Go Beyond This Newsletter

We know many of you enjoy reading the daily newsletter, but remember that with our Dividend.com Premium service, the newsletter is just one small component of what we offer. Here are the “Big Three” benefits of our Premium service:

- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.

- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a “Dividend Capture” trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.

We don’t ask for a credit card to use our free trial, and we don’t bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Dividend.com Premium a shot if you haven’t already subscribed!